Diversified Corporate (AMEX:HIR)
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Diversified Corporate Resources Announces Discussions With
Lenders and Resignation of Director
DALLAS, June 17 /PRNewswire-FirstCall/ -- On June 8, 2004, Diversified
Corporate Resources, Inc. (AMEX:HIR) (the "Company") announced that it had
retained a specialized tax consultant to initiate discussions with the Internal
Revenue Service regarding the payment of $2.5 million in unpaid Section 941
taxes owed by the Company for periods during the first and second quarters of
2004. Based on these discussions, the Company will have a time period of at
least 120 days to either pay this liability in full or enter into a
satisfactory payment plan, if necessary. Currently, the Company has $.6
million in a restricted cash account reserved for payment against this balance
reducing the amount of required funds to approximately $1.9 million.
The nonpayment of taxes has caused Wells Fargo Business Credit, Inc. to
declare, on June 14, 2004, that a default currently exists under the Accounts
Purchase Agreement between Datatek Group Corporation, a wholly-owned subsidiary
of the Company and Wells Fargo. Previous to this declaration, the Company had
initiated discussions with other lenders regarding the payoff of balances due
to Wells Fargo. Therefore, although the final outcome is not free from doubt,
the Company plans to either complete a financing agreement with one of these
lenders, or correct the default event(s) to the satisfaction of Wells Fargo on
or before July 30, 2004. In the meantime, Wells Fargo is continuing to
purchase accounts receivables from the Company.
Pending resolution of the above, the Company will be unable to release the 2003
financial statements, its Proxy Statement for the 2004 Annual Meeting and the
filing with the Securities and Exchange Commission of its 2003 Annual Report on
Form 10-K, its amended and restated Forms 10-Q for the first three quarters of
2003, and the Quarterly Report on Form 10-Q for the first quarter of 2004.
On June 18, 2004, the Company will present to the American Stock Exchange (the
"Exchange") a plan, which would amend a plan previously submitted to the
Exchange on May 24, 2004, whereby it would file the required SEC reports and
otherwise regain full compliance on or before July 30, 2004, while, in the
meantime, the halt in trading currently in effect would continue. The Exchange
may or may not accept the amended plan. If such plan is not accepted, the
Exchange may initiate delisting proceedings. These proceedings, including the
periods set aside for appeals, are likely to take at least sixty days. The
Company believes that the proceedings would terminate and its stock would
resume trading if the Company filed the SEC reports and otherwise regained full
compliance with the listing standards at any time during the pendency of such
proceedings.
Effective June 10, 2004, W. Brown Glenn, Jr., has resigned as a director and
President of the Company. Mr. Glenn did not request publication of any
disagreement with the Company in connection with his resignation.
The Company will make further announcements as additional information becomes
available.
Diversified Corporate Resources, Inc. is a national employment services and
consulting firm, servicing Fortune 500 and larger regional companies with
permanent recruiting and staff augmentation in the fields of Engineering,
Information Technology, Healthcare, BioPharm and Finance and Accounting. The
Company currently operates a nationwide network of nine regional offices.
Statements in this Press Release that are not historical facts, including, but
not limited to, projections or expectations of future financial or economic
performance of the Company, and statements of our plans and objectives for
future operations are "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended and involve a number of risks and
uncertainties. No assurance can be given that actual results or events will
not differ materially from those projected, estimated, assumed or anticipated
in any such "forward-looking" statements. Important factors (the "Cautionary
Disclosures") that could result in such differences include: general economic
conditions in our markets, including inflation, recession, interest rates and
other economic factors; the availability of qualified personnel; our ability to
successfully integrate acquisitions or joint ventures with our operations
(including the ability to successfully integrate businesses that may be diverse
as to their type, geographic area or customer base); the level of competition
experienced by us; our ability to implement our business strategies and to
manage our growth; the level of development revenues and expenses; the level of
litigation expenses, and other factors that affect businesses generally.
Subsequent written and oral "forward- looking" statements attributable to us,
or persons acting on our behalf, are expressly qualified by the Cautionary
Disclosures.
DATASOURCE: Diversified Corporate Resources, Inc.
CONTACT: Laurence Cottingham of Diversified Corporate Resources, Inc.,
+1-972-458-8500
Web site: http://www.dcri.net/